JOHNSON BROS. v. CITY OF CHARLOTTE, 2024 NCBC 11

STATE OF NORTH CAROLINA
MECKLENBURG COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS00 2076-590
JOHNSON BROS. CORPORATION,
A SOUTHLAND COMPANY,
Plaintiff,
v.
CITY OF CHARLOTTE,
Defendant.
ORDER AND OPINION ON
DEFENDANT CITY OF CHARLOTTE’S
MOTIONS TO DISMISS
JOHNSON BROS. CORPORATION,
A SOUTHLAND COMPANY,
Third-Party
Plaintiff,
v.
URS CORPORATION,
Third-Party
Defendant.
1. 	THIS MATTER is before the Court on Defendant City of Charlotte’s
Motions to Dismiss Plaintiff’s Claims (the “Motion”) under Rules 12(b)(1), 12(b)(2),
and 12(b)(6) of the North Carolina Rules of Civil Procedure (the “Rules”) in the above-
captioned case.1
2. 	This case involves a dispute between Johnson Brothers Corporation, a
Southland Company (“JBC”), which served as the general contractor on the City of
Charlotte’s 	(the 	“City”) 	CityLYNX 	Gold 	Line 	Streetcar 	extension 	project 	(the
“Project”), and the City over the City’s alleged breaches of the parties’ contract for
1 (Def. City Charlotte’s Mots. Dismiss, Answer First Am. Verified Compl., and Countercl.
[hereinafter, the “Mots.”], ECF No. 3.)
Johnson Bros. v. City of Charlotte, 2024 NCBC 11.

construction of the Project. 	The City denies all liability and seeks to dismiss JBC’s
claims on grounds that those claims are barred by sovereign immunity and by the
applicable statute of limitations.
3. 	Having considered the Motion, the materials submitted in support of and in
opposition to the Motion, the arguments of counsel at the hearing on the Motion, and
other appropriate matters of the record, the Court hereby GRANTS in part and
DENIES in part the Motion as set forth below.
Cokinos Young, by John P. DiBiasi and Branson Rogers, and Windle
Terry Bimbo, by Steele B. Windle, III, for Plaintiff Johnson Bros.
Corporation, a Southland Company.
Hamilton Stephens Steele + Martin, PLLC, by Rebecca K. Cheney,
Bentford E. Martin, and Graham B. Morgan, for Defendant City of
Charlotte.
Bledsoe, Chief Judge.
I.
FACTUAL BACKGROUND
4. 	The Court recites the allegations asserted and the documents referenced in
the Amended Complaint that are relevant to the Court’s determination of the Motion.
5. 	JBC is a Texas corporation with its principal place of business in Grapevine,
Texas.2 The City is a local government existing under the laws of the State of North
Carolina.3
2 (First. Am. Verified Compl. [hereinafter, “Am. Compl.”] ¶ 1, ECF No. 2.)
3 (Am. Compl. ¶ 2.)

6. 	In October 2016, the City solicited contractors to submit competitive bid
proposals for the construction of the Project and published plans and specifications
for contractors to rely upon in preparing their bids.4 JBC submitted a bid proposal
to the City and was selected as the Project’s general contractor on 28 November 2016.5
Thereafter, the City and JBC entered into a contract for construction of the Project
(the “Contract”), and JBC began work on the Project after the City issued a Notice to
Proceed on 27 February 2017.6 	The Contract included a provision adopting a
mandatory mediation process (the “Mediation Process”) and providing that full
compliance with the Mediation Process was a precondition to initiating litigation
concerning a dispute arising under the Contract.7 The Contract incorporated plans
and specifications that provided the sequence of construction and the scope of work
for the Project, including the traffic control measures the contractor could expect (the
“Plans and Specifications”).8
7. 	The 	Contract 	also 	incorporated 	portions 	of 	the 	2012 	North 	Carolina
Department of Transportation’s Standard Specifications for Roads and Structures
(the “SSRS”).9 	The SSRS is a compilation of standard requirements used by the
4 (Am. Compl. ¶ 6.)
5 (Am. Compl. ¶¶ 7–9.)
6 (Am. Compl. ¶¶ 7–9, 19.)
7 (Index Exs. Filed Supp. Def. City Charlotte’s Mots. Ex. 1, Standard Special Provisions
Article 2.32 [hereinafter, the “Contract”], ECF Nos. 26.1, 26.2, 26.3.)
8 (Am. Compl. ¶¶ 10, 15.)
9 (Am. Compl. ¶ 12; Contract 79–81.)

North Carolina Department of Transportation for construction contracts.10 At issue
here are the SSRS procedures through which a contractor may seek additional
compensation under the Contract.
8. 	The SSRS defines “extra work” as “work found necessary or desirable to fully
complete the work as contemplated in the contract for which payment is not provided
for by the contract unit or lump sum prices in the original contract.”11
9. 	Section 104-7 of the SSRS sets forth the procedure the contractor must
follow to be compensated for “extra work”:
When the Contractor is required to perform work that is, in his opinion,
extra work, he shall notify the Engineer in writing before performing
such 	work. 	The 	Engineer 	will 	investigate 	and, 	based 	upon 	his
determination, one of the following will occur.
(A) If the Engineer determines that the affected work is extra
work, the Contractor will be notified in writing by the Engineer
and compensation will be made in accordance with [Section] 104-
8(A).
(B) If the Engineer determines that the work is not extra work,
he will notify the Contractor in writing of his determination. If
the 	Contractor 	upon 	receipt 	of 	the 	Engineer's 	written
determination intends to file a claim for additional compensation
by reason of such work, he shall notify the Engineer in writing of
such intent before beginning any of the alleged extra work and in
conformance with [Section] 104-8(B).
Work performed without prior written consent of the Engineer will be
considered incidental to the work of the contract.12
10 (Index Exs. Filed Supp. Def. City Charlotte’s Mots. Dismiss Ex. 10 [hereinafter, “SSRS”],
ECF No. 26.12.)
11 (SSRS Section 101.)
12 (SSRS Section 104-7.)

10. 	In relevant part, SSRS Section 104-8 provides that when the City’s engineer
has determined that the disputed work is not “extra work” and the contractor has
submitted a notice of intent to file a claim for additional compensation under Section
104-7, 	the 	work 	is 	“force 	account 	work.”13 	Section 	109-4 	sets 	forth 	specific
documentation procedures the contractor must follow in submitting records of force
account work (together with the procedures enumerated in Section 104-8, the “Notice
and Documentation Requirements”).14
11. 	Section 104-3 delineates a similar procedure for contractors to follow in the
event that the City’s engineer directs an “alteration in the plans or details of
construction that materially changes the character of the work and the cost of
performing the work.” The Notice and Documentation Requirements apply to claims
made under Section 104-3 as well.15
12. 	The SSRS also provides in Section 104-2 that the City may enter into
supplemental 	agreements 	with 	the 	contractor 	when 	it 	is 	necessary 	to 	make
amendments to satisfactorily complete the proposed construction or to provide
authorized time extensions.16
13. 	Finally, the SSRS provides the contractor a right to file a verified claim:
If the Contractor fails to receive such settlement as he claims to be
entitled 	to 	under 	the 	terms 	and 	provisions 	of 	the 	contract, 	the
13 (SSRS Section 104-8(B).)
14 (SSRS Section 109-4.)
15 (SSRS Sections 104-3, 104-8, 109-4.)
16 (SSRS Section 104-2.)

Contractor may submit a written and verified claim for such amounts
he deems himself or his subcontractor entitled to under the terms and
provisions of the contract provided he has complied with the applicable
provisions of the contract including, but not limited to, giving written
notice of intent to file a claim, keeping and submission of cost records
and the initial submission of a written claim within the specified time
period.17
14. 	JBC alleges that from almost the outset of the Project, the City made major
changes to the contracted scope of work that had been set forth, at least in part, by
the Plans and Specifications, including changes to traffic control plans, unanticipated
restrictions and limitations on JBC’s working hours, conflicts with other contractors,
and unexpected requirements for constructing new storm drain structures, as
opposed to planned pre-cast drain structures.18
15. 	In February 2018, the City notified JBC that it believed JBC’s progress on
the Project was unsatisfactory and threatened to assess liquidated damages.19 	In
response, JBC sent a letter to the City in March 2018 asserting that the delays to the
Project were the result of factors caused by the City which prevented JBC from
completing the work within the anticipated time frame set forth in the Plans and
Specifications (the “March 2018 Letter”).20 	These factors included (i) the City’s
failure to timely obtain encroachment agreements, (ii) the City’s changes to traffic
control plans, (iii) the City’s delayed submittals for precast concrete structures and
17 (SSRS Section 107-24.)
18 (Am. Compl ¶¶ 20–38.)
19 (Am. Compl. ¶ 39.)
20 (Index Exs. Filed Supp. Def. City Charlotte’s Mots. Dismiss Ex. 2, ECF No. 26.4; Pl.’s Br.
Opp’n City’s Mots. Dismiss Ex. 4, ECF No. 36.)

the inability to use precast concrete structures, (iv) the City’s changes to the storm
drain system on Hawthorne Lane, and (v) a gas line conflict at the intersection of 7th
Street and Hawthorne Lane.21 	The City responded to the March 2018 letter in
August 2018, advising that “no time extension [could] be determined at [that] time.”22
In October 2018, JBC and the City exchanged letters again—JBC’s letter reiterating
that 	the 	City-imposed 	factors 	had 	caused 	JBC’s 	delay 	and 	the 	City’s 	letter
complaining that JBC’s progress on the Project was unsatisfactory.23
16. 	JBC and the City exchanged many letters of a similar nature after October
2018, including until well after the Project was opened for public use on 30 August
2021 (at least until November 2021).24 Despite the parties’ disagreements, they did
not enter into a supplemental agreement or engage in the Mediation Process under
the Contract during this time.
17. 	JBC submitted the first official claim letter on 30 September 2020 (the
“September 2020 Claim Letter”).25 In that letter, JBC sought to “initiate discussions
21 (Index Exs. Filed Supp. Def. City Charlotte’s Mots. Dismiss Ex. 2.)
22 (Pl.’s Br. Opp’n City’s Mots. Dismiss Ex. 5, ECF No. 37.)
23 (Pl.’s Br. Opp’n City’s Mots. Dismiss Ex. 6, 7, ECF Nos. 38, 39; Index Exs. Filed Supp. Def.
City Charlotte’s Mots. Dismiss Ex. 4, ECF No. 26.6.)
24 (Am. Compl. ¶¶ 46–59; Pl.’s Br. Opp’n City’s Mot. Dismiss Exs. 10, 23–24, 26–27, ECF Nos.
42, 55–56, 58–59; Index Exs. Filed Supp. Def. City Charlotte’s Mots. Dismiss Ex. 5, ECF No.
26.7.)
25 (Index Exs. Filed Supp. Def. City Charlotte’s Mots. Dismiss Ex. 7 [hereinafter, the
“September 2020 Claim Letter”], ECF No. 26.9; Pl.’s Br. Opp’n City’s Mots. Dismiss Ex. 21,
ECF No. 53.)

that [would] allow JBC and the City to resolve all outstanding commercial issues.”26
To this end, JBC listed nine “disruptions” that it claimed impacted the nature and
character of the work and resulted in delays, which it titled: (i) “Extra-Contractual
Traffic Control & Workhour Restrictions,” (ii) “Conflicts with Existing Utilities,” (iii)
“Interference by Other Contractors—New Construction,” (iv) “Brick Built Boxes vs.
Pre-Cast 	Storm 	Drain 	Structures,” 	(v) 	“Design 	Changes/Plan 	Revisions,” 	(vi)
“Hawthorne 	Bridge—Abutment 	Beam 	Seat 	Elevation 	Discrepancies,” 	(vii)
“Hawthorne 	Bridge—Deck 	Elevation,” 	(viii) 	“Extra-Contractual 	Submittal
Requirements and Extended Review/Approval,” and (ix) “COVID-19, Social Justice
Protests, and Weather.”27
18. 	JBC submitted another claim letter on 1 March 2021. 	This letter updated
the September 2020 Claim letter based on the status of the Project as of February
2021.28 	Eight months later, on 2 November 2021, JBC submitted a Preliminary
Verified Claim and requested to begin the Mediation Process provided by the
Contract.29
19. 	Although the City opened the Project for public use on 30 August 2021, the
City declined to certify substantial or final completion of the Project at that time and
instead issued lists identifying additional work JBC was to complete, including
26 (September 2020 Claim Letter.)
27 (September 2020 Claim Letter.)
28 (Pl.’s Br. Opp’n City’s Mots. Dismiss Ex. 23.)
29 (Am. Compl. ¶ 56; Pl.’s Br. Opp’n City’s Mots. Dismiss Ex. 27.)

maintenance “punch lists.”30 JBC claims that it completed most of these “punch list”
items, but the City notified JBC on 4 April 2023 that it considered JBC to be in default
for failure to complete all of the items by the Contract’s completion date.31
20. 	Almost all of the nearly 70 pay applications JBC submitted for Project work
were paid late, some remaining unpaid until at least January 2023.32 JBC and the
City completed a mediation concerning JBC’s claims but reached an impasse on 27
January 2023.33
II.
PROCEDURAL BACKGROUND
21. 	On 31 January 2023, JBC initiated this action by requesting and obtaining
the issuance of a summons and permission from the Court to file its complaint within
20 days thereafter under Rule 3(a).34 JBC then timely filed its original Complaint on
20 February 202335 and thereafter filed its First Amended Complaint (“Amended
30 (Am. Compl. ¶ 59.) 	At the Hearing, JBC’s counsel represented that for purposes of the
Motion, JBC agreed that “substantial completion” occurred on 31 August 2021. 	(See
November 2, 2023 Hr’g Tr. 83:13–15 [hereinafter “Tr.”], ECF No. 88) (“But for purposes of
the analysis, Your Honor, we will agree for this analysis substantial completion in that term
occurred on August 31, 2021.”).
31 (Am. Compl. ¶ 62.)
32 (Am. Compl. ¶ 58.)
33 (Pl.’s Br. Opp’n City’s Mots. Dismiss Exs. 29, 30, ECF Nos. 61, 62.)
34 (Application and Order Extending Time File Compl., ECF No. 9); see also N.C.R. Civ. P.
3(a) (“A civil action may . . . be commenced by the issuance of a summons when (1) A person
makes application to the court stating the nature and purpose of his action and requesting
permission to file his complaint within 20 days and (2) The court makes an order stating the
nature and purpose of the action and granting the requested permission.”)
35 (Verified Compl., ECF No. 10.)

Complaint”) on 12 April 2023.36 	JBC asserted ten claims against the City in the
Amended Complaint: (i) breach of contract, (ii) material alteration/fundamental
change, (iii) breach of expressed & implied warranties, (iv) breach of the implied
covenant of good faith and fair dealing, (v) misrepresentation, (vi) mutual mistake,
(vii) violation of the Prompt Payment Act, (viii) unjust enrichment, (ix) quantum
meruit, and (x) pass-through claims of subcontractors.37
22. 	On 1 June 2023, the City filed the Motion, seeking dismissal of each of JBC’s
ten 	claims.38 	JBC 	later 	voluntarily 	dismissed 	four 	of 	its 	claims: 	material
alteration/fundamental 	change, 	misrepresentation, 	unjust 	enrichment, 	and
quantum meruit.39
23. 	After full briefing, the Court convened a hearing on the Motion on 2
November 2023, at which all parties were represented by counsel (the “Hearing”).
The Motion is now ripe for resolution.
36 (Am. Compl., ECF No. 2.)
37 (Am. Compl. ¶¶ 69–142.)
38 (Mots.) 	Although the City moved to dismiss JBC’s claim for violation of the Prompt
Payment Act, it conceded in its brief supporting the Motion and at the Hearing that this
claim should survive the City’s Motion. Accordingly, the Court will deny the Motion to the
extent the City seeks dismissal of this claim. 	(See Def. City Charlotte’s Br. Supp. Mots.
Dismiss 2 [hereinafter “City’s Br. Supp.”], ECF No. 29; Tr. 16:04–07.)
39 (Johnson Bros. Corp.’s Notice Dismissal Certain Causes Action Without Prejudice, ECF
No. 82.)

III.
LEGAL STANDARD
24. 	The City brings the Motion under Rules 12(b)(1), 12(b)(2), and 12(b)(6),40
and, as noted above, seeks dismissal of JBC’s claims based on sovereign immunity.41
In North Carolina, the appropriate rule for consideration of a motion to dismiss on
the grounds of sovereign immunity is somewhat unsettled. See, e.g., Battle Ridge Cos.
v. N.C. Dep’t Transp., 161 N.C. App. 156, 157 (2003) (“Our courts have held that the
defense of sovereign immunity is a Rule 12(b)(1) defense. Our courts have also held
that the defense of sovereign immunity is a matter of personal jurisdiction that would
fall under Rule 12(b)(2)[.]” (internal citation omitted)); Farmer v. Troy Univ., 382 N.C.
366, 369–70 (2022) (reviewing a motion to dismiss on the grounds of sovereign
immunity made under 12(b)(6)). Our Court of Appeals, however, recently determined
that “[issues of sovereign immunity] should be classified as [issues] of personal
jurisdiction under Rule 12(b)(2).” 	Torres v. City of Raleigh, 288 N.C. App. 617, 620
(2023). 	Accordingly, the Court will construe the Motion for dismissal on sovereign
immunity grounds as an issue of personal jurisdiction under Rule 12(b)(2) and apply
the appropriate standard of review for motions under that Rule.
25. 	“The standard of review to be applied by a trial court in deciding a motion
under Rule 12(b)(2) depends upon the procedural context confronting the court.” Id.
40 (See Mots.; City’s Br. Supp.19.)
41 (City’s Br. Supp. 23–34; see also Mots. 2.)

(quoting Banc of Am. Sec., LLC v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690,
693 (2005)).
When neither party submits evidence, the allegations of the complaint
must disclose jurisdiction although the particulars of jurisdiction need
not be alleged. 	The trial judge must decide whether the complaint
contains allegations that, if taken as true, set forth a sufficient basis for
the court’s exercise of personal jurisdiction.
If the defendant supplements his motion to dismiss with an affidavit or
other supporting evidence, the allegations in the complaint can no
longer be taken as true or controlling and plaintiff cannot rest on the
allegations of the complaint. In this circumstance, in order to determine
whether there is evidence to support an exercise of personal jurisdiction,
the court then considers (1) any allegations in the complaint that are not
controverted by the defendant’s affidavit and (2) all facts in the affidavit
(which are uncontroverted because of the plaintiff’s failure to offer
evidence.)
Parker v. Town of Erwin, 243 N.C. App. 84, 96 (2015) (cleaned up) (quoting Banc of
Am. Sec., LLC, 169 N.C. App. at 693–94).
26. 	When 	“the 	parties 	each 	submit[ ] 	affidavits, 	depositions, 	and 	other
documentary evidence to the trial court for consideration as to whether it ha[s]
personal jurisdiction[,]” the Court “ha[s] the responsibility of acting as a fact-finder,
and [is] responsible for determining the weight and sufficiency of the evidence.” Id.
at 99 (cleaned up). 	“In such circumstances . . . a plaintiff then has the ultimate
burden of proving jurisdiction rather than the initial burden of establishing prima
facie that jurisdiction was proper.” Id. at 97 (cleaned up).
27. 	The City also seeks dismissal of all claims apart from JBC’s claim for
violation of the Prompt Payment Act under Rule 12(b)(6) on the ground that they are
barred by the applicable statute of limitations. When deciding whether to dismiss for

failure to state a claim under Rule 12(b)(6), the Court considers “whether the
allegations of the complaint, if treated as true, are sufficient to state a claim upon
which relief can be granted under some legal theory.” Corwin v. Brit. Am. Tobacco,
PLC, 371 N.C. 605, 615 (2018) (quoting CommScope Credit Union v. Butler & Burke,
LLP, 369 N.C. 48, 51 (2016)).
28. 	“[D]ismissal pursuant to Rule 12(b)(6) is proper when ‘(1) the complaint on
its face reveals that no law supports the plaintiff’s claim; (2) the complaint on its face
reveals the absence of facts sufficient to make a good claim; or (3) the complaint
discloses some fact that necessarily defeats the plaintiff’s claim.’ ” Corwin, 371 N.C.
at 615 (quoting Wood v. Guilford County, 355 N.C. 161, 166 (2002)).
29. 	Under Rule 12(b)(6), “the trial court is to construe the pleading liberally and
in the light most favorable to the plaintiff, taking as true and admitted all well-
pleaded factual allegations contained within the complaint.” 	Donovan v. Fiumara,
114 N.C. App. 524, 526 (1994) (cleaned up); see also, e.g., Sykes v. Health Network
Sols., Inc., 372 N.C. 326, 332 (2019) (recognizing that, under Rule 12(b)(6), the
allegations of the complaint should be “view[ed] as true and in the light most
favorable to the non-moving party”) (cleaned up).
30. 	When considering a motion to dismiss under Rule 12(b)(6), a court “may
properly consider documents which are the subject of a plaintiff’s complaint and to
which the complaint specifically refers even though they are presented by the
defendant.” Oberlin Cap., L.P. v. Slavin, 147 N.C. App. 52, 60 (2001); see, e.g., Deluca
v. River Bluff Holdings II, LLC, 2015 NCBC LEXIS 12, at *8 (N.C. Super. Ct. Jan.

28, 2015) (stating that under Rule 12(b)(6), “a trial court may properly consider a
contract that is the subject matter of the complaint, even if the plaintiff did not attach
it to the complaint[ ]”).
IV.
ANALYSIS
A. 	Sovereign Immunity
31. 	The Court addresses the City’s sovereign immunity defense on a claim-by-
claim basis.
1. 	Breach of Contract and Pass-Through Claims
32. 	“As a general rule, under the doctrine of sovereign immunity, the State is
immune from suit absent waiver of immunity.” Wray v. City of Greensboro, 370 N.C.
41, 47 (2017) (cleaned up). 	“Governmental immunity is that portion of the State’s
sovereign immunity which extends to local governments.” Id. “Although the State’s
sovereign immunity applies to both its governmental and proprietary functions, the
more limited governmental immunity covers only the acts of a municipality or a
municipal 	corporation 	committed 	pursuant 	to 	its 	governmental 	functions.”
Providence Volunteer Fire Dep’t, Inc. v. Town of Weddington, 382 N.C. 199, 211–12
(2022) (cleaned up).
a. 	Governmental Activity
33. 	The City asserts that the acts which gave rise to JBC’s claims—the
extension of an operating streetcar system—were committed pursuant to the City’s

governmental function.42 JBC relies upon the Court of Appeals’ decision in Town of
Sandy Creek v. E. Coast Contracting, Inc., 226 N.C. App. 576 (2013), to contend in
opposition that the City’s acts in contracting for the construction of the streetcar
system were proprietary functions because “a local governmental unit acts in a
proprietary function when it contracts with engineering and construction companies,
regardless of whether the project under construction will be a governmental function
once it is completed.”43
34. 	Both the City and JBC have submitted affidavits and documentary evidence
in support of and in opposition to the Motion.44 As a result, the Court must determine
the weight and sufficiency of that evidence. 	See Parker, 243 N.C. App. at 99.
Accordingly, the Court hereby enters the following findings of fact and conclusions of
law on whether the City’s acts giving rise to JBC’s claims were committed pursuant
to the City’s governmental function or its proprietary function.
42 (City’s Br. Supp. 21–23.)
43 (See Pl. Johnson Bros. Corporation, a Southland Company’s Br. Opp’n City of Charlotte’s
Mots. Dismiss 13 [hereinafter, “JBC’s Br. Opp’n”] (quoting Town of Sandy Creek, 226 N.C.
App. at 581–82), ECF No. 30.)
44 (See Aff. Kelly Ridall Goforth Supp. Def.’s Mots. Dismiss, dated Aug. 29, 2023 [hereinafter,
“Goforth Aff.”], ECF No. 27; Aff. Imad Mohammed Supp. Pl.’s Br. Opp’n City’s Mots. Dismiss,
dated Sept. 20, 2023 [hereinafter, “Mohammed Aff.”], ECF No. 31.) 	In his affidavit,
Mohammed lists 26 exhibits and asserts that they are “true and correct copies of project
correspondence between JBC and [the City.]” (Mohammed Aff. ¶ 3.) The documents to which
Mohammed refers are attached as exhibits to JBC’s brief in opposition to the Motion. (See
Pl.’s Johnson Bros. Corporation, a Southland Company’s Br. Opp’n Def. City of Charlotte’s
Mots. Dismiss Exs. 3–29, ECF Nos. 35–62.)

FINDINGS OF FACT45
35. 	Public transportation in Charlotte, North Carolina is provided by the
Charlotte Area Transit System and all public transportation assets are owned by the
City.46 	The CityLYNX Gold Line Streetcar (the “Gold Line”) is a streetcar system
that is being implemented in Charlotte in phases as a part of the Charlotte Area
Transit System’s public transportation plan.47 	The Gold Line opened for service to
the public in 2021 and has been free of charge to users since that time.48
36. 	Nearly all public transit services in the United States, including buses, light
rail, streetcars, and paratransit, are provided by public agencies, and the twenty-two
streetcar 	agencies 	currently 	operating 	across 	the 	country 	are 	either 	public
transportation authorities, local governments, or non-profit agencies.49
CONCLUSIONS OF LAW
37. 	Our Supreme Court has “long held that a ‘governmental’ function is an
activity that is discretionary, political, legislative, or public in nature and performed
for the public good in behalf of the State rather than for itself.” Estate of Williams ex
rel. Overton v. Pasquotank Cnty. Parks & Recreation Dep’t, 366 N.C. 195, 199 (2012).
The Supreme Court set forth the following test in Estate of Williams to ascertain
45 Any findings of Fact that are more appropriately deemed Conclusions of Law are
incorporated by reference into the Court’s Conclusions of Law.
46 (Goforth Aff. ¶ 6.)
47 (Goforth Aff. ¶¶ 7–8.)
48 (Goforth Aff. ¶ 9.)
49 (Goforth Aff. ¶¶ 4–5.)

“whether an action undertaken by a county or municipality is governmental or
proprietary in nature[:]”
[T]he threshold inquiry in determining whether a function is proprietary
or governmental is whether, and to what degree, the legislature has
addressed the issue. . . .
[W]hen 	an 	activity 	has 	not 	been 	designated 	as 	governmental 	or
proprietary by the legislature, that activity is necessarily governmental
in nature when it can only be provided by a governmental agency or
instrumentality. . . .
[W]hen the particular service can be performed both privately and
publicly, the inquiry involves consideration of a number of additional
factors, of which no single factor is dispositive. Relevant to this inquiry
is 	whether 	the 	service 	is 	traditionally 	a 	service 	provided 	by 	a
governmental entity, whether a substantial fee is charged for the service
provided, and whether that fee does more than simply cover the
operating costs of the service provider. We conclude that consideration
of these factors provides the guidance needed to identify the distinction
between a governmental and proprietary activity.
Id. at 200, 202–203.
38. 	Turning to the first prong of the Estate of Williams test—the threshold
inquiry—it is undisputed that the legislature has not specifically determined whether
the construction of an extension of a streetcar system or providing the streetcar
system itself reflects a governmental or a proprietary function. Therefore, the Court
must turn to the second and third prongs of the Estate of Williams test. 	Here, the
evidence shows that the City does not charge a fee for its streetcar service and that
streetcar 	systems 	in 	the 	United 	States 	are 	typically 	a 	component 	of 	public
transportation 	provided 	by 	public 	agencies.50 	These 	“additional 	factors” 	as
contemplated by the third prong of the Estate of Williams test compel the conclusion
50 (Goforth Aff. ¶¶ 4–5.)

that the City’s provision of its streetcar system is a governmental activity. See, e.g.,
Providence Volunteer Fire Dep’t, Inc., 382 N.C. at 217 (holding that the “additional
factors 	mentioned 	in 	Estate 	of 	Williams . . . clearly 	tend[] 	to 	suggest 	that 	the
activities . . . were 	governmental” 	where 	the 	services 	a 	town 	provided 	were
traditionally provided by the government, either directly or through contracts with
private entities, and the town did not charge a fee for the service or make a profit in
connection with the service.) JBC does not allege facts or offer evidence to challenge
otherwise.51
39. 	Further, the Court finds JBC’s reliance on Town of Sandy Creek unavailing.
In Town of Sandy Creek, the Court of Appeals divided the governmental entity’s
activity between the provision of the public service and the contracting for its
construction and determined the latter to be proprietary. 	226 N.C. App. at 581–82.
The Supreme Court, however, rejected that approach in Providence Volunteer Fire
Department, Inc., holding instead that the proper inquiry to determine whether a
governmental entity’s act is a governmental function is the three-step test provided
by Estate of Williams. The Court stated:
[W]e decline [the plaintiff’s] invitation to divide the activity in which the
[t]own was engaged into multiple, separate pieces[.] . . . [G]iven that
[the town] would need a fire station in order to provide service to the
[t]own and given that the transaction reflected in the [contract] set out
the manner in which the needed fire station would be provided, we are
unable to divorce the provisions of the [contract] from the remainder of
the overall transaction between the parties, which was clearly intended
to ensure that the residents of the [t]own received fire protection
services.
51 (See generally Mohammed Aff.)

Providence Volunteer Fire Dep’t, Inc., 382 N.C. at 218.
40. 	Based on the above, the Court concludes that, because the City’s provision
of the streetcar system is a governmental function under the third prong of the Estate
of Williams test, the City is, absent waiver, entitled to governmental immunity
against JBC’s claims.
b. 	Waiver of Governmental Immunity
41. 	The Court next considers whether the City has waived its governmental
immunity and consented to be sued on JBC’s claims under the Contract. 	Our
Supreme Court has held that “whenever the State of North Carolina, through its
authorized officers and agencies, enters into a valid contract, the State implicitly
consents to be sued for damages on the contract in the event it breaches the
contract . . . [I]n causes of action on contract, . . . the doctrine of sovereign immunity
will not be a defense to the State.” 	Smith v. State, 289 N.C. 303, 320 (1976). 	“[A]
waiver of governmental immunity is implied, and effectively alleged, when the
plaintiff pleads a contract claim.” Wray v. City of Greensboro, 370 N.C. 41, 48 (2017).
“Thus, an allegation of a valid contract is an allegation of waiver of governmental
immunity.” Id.
42. 	The City contends that, since the Contract requires that the contractor
comply with the Notice and Documentation Requirements to receive additional
compensation above the contract price, JBC’s failure to satisfy the Notice and
Documentation Requirements for each component of its breach of contract claim bars

JBC’s claim under governmental immunity.52 For the same reason, the City argues
that the pass-through claims of JBC’s subcontractors should be dismissed. Like with
JBC’s contract claim, the City argues that the SSRS conditions subcontractor
recovery on compliance with the same notice and documentation procedure, which
the City contends JBC did not follow here.53
43. 	In response, JBC argues that it is inappropriate for the Court to consider
whether JBC has complied with the contractual procedures for recovery at this stage
of the litigation because the Court is not to consider the merits of a claim when
addressing the applicability of sovereign immunity.54 JBC contends that the inquiry
into sovereign immunity at this stage is determined solely by whether a plaintiff has
pleaded the existence of a valid contract with the City.55 The Court agrees with JBC.
44. 	The general rule, as announced in Smith v. State, is that “that whenever the
State of North Carolina, through its authorized officers and agencies, enters into a
valid contract, the State implicitly consents to be sued for damages on the contract in
the event it breaches the contract.” 289 N.C. at 320. Further, our Court of Appeals
has clarified that “consistent with the concept of notice pleading, a complaint need
only allege facts that, if taken as true, are sufficient to establish a waiver by the State
of sovereign immunity.” 	Can Am S., LLC v. State, 234 N.C. App. 119, 126 (2014)
52 (City’s Br. Supp. 24–30.)
53 (City’s Br. Supp. 33–34.)
54 (JBC’s Br. Opp’n 12–13.)
55 (JBC’s Br Opp’n 12.)

(quoting Fabrikant v. Currituck County, 174 N.C. App 30, 38 (2005)). 	To meet this
burden, 	a 	plaintiff 	need 	only 	“plead[ ] 	with 	particularity 	the 	circumstances
surrounding their entry into [ ] valid contracts with [the State.]” Can Am S., LLC,
234 N.C. App. at 126; see also Wray, 370 N.C. at 50 (holding that plaintiff’s allegations
that the defendant City of Greensboro failed to honor its contractual obligations to
plaintiff were sufficient to establish wavier of governmental immunity “[i]n light of
the low bar for notice pleading . . . as well as the waiver of governmental immunity
that is inferred from the pleading of a contract claim.”)
45. 	In Can Am South, LLC, the State argued that the plaintiff could not
establish waiver of sovereign immunity because the State did not breach the
contracts at issue. 234 N.C. App. at 126. The court, however, rejected this argument,
stating that “[courts] are not to consider the merits of a claim when addressing the
applicability of sovereign immunity as a potential defense to liability.” 	Id. at 127.
The court then explained the following about the rule announced in Smith:
[A]ll applicable caselaw leads us to conclude that the State waives its
sovereign immunity when it enters into a contract with a private party,
not when it engages in conduct that may or may not constitute a
breach[.] It is plain to us that the phrases “in the event it breaches the
contract” and “if it breaches that contract” in [Smith and its progeny]
refer to the events that would typically trigger a suit against the State.
They do not mean that the State only waives its sovereign immunity “in
the event it breaches the contract” and “if it breaches that contract.” 	To
hold otherwise would require a plaintiff to definitively establish its
entire cause of action against the State in its complaint without the
opportunity to conduct discovery, a result that was clearly unintended
by the Smith Court when it adopted the doctrine of implied waiver of
sovereign immunity in this context.
Id. at 127 (emphasis in original).

46. 	The City contends that inquiry into JBC’s compliance with the Notice and
Documentation Requirements is not an inquiry into the merits of JBC’s claim.
Rather, the City posits that an inquiry into the merits of JBC’s claim would focus on
whether the City engaged in the conduct JBC alleges constituted a breach of the
Contract, i.e. whether the City changed the traffic control plans, whether the City
obstructed JBC’s progress, etc.56 This argument, however, is unpersuasive because
determining compliance with conditions precedent (i.e., JBC’s compliance with the
Notice and Documentation Requirements) is a component of determining breach,
which is therefore an inquiry into the merits of JBC’s claim. 	For this reason, the
Court concludes that Smith precludes the Court from considering whether JBC
complied with the Notice and Documentation Requirements in determining whether
the City has waived sovereign immunity on the current Motion.
47. 	Based on the above, the Court concludes that the City’s entry into the
Contract waived its governmental immunity to permit JBC’s assertion of its breach
of contract claim and the pass-through claims of its subcontractors. The City’s Motion
seeking dismissal of these claims on sovereign immunity grounds must therefore be
denied.57
56 (Tr. 23:20–24:08.)
57 The Court notes that the parties devoted significant portions of their briefs, (see JBC’s Br.
Opp’n 13–15; City’s Reply Br. Supp. Mots. Dismiss [hereinafter, “City’s Reply Br.”] 8–11, ECF
No. 67), and significant argument at the Hearing on whether the Notice and Documentation
Requirements apply to JBC’s Contract-based claims and whether the Amended Complaint
and its referenced documents establish that JBC complied with those Requirements. Since
the Court has determined that JBC’s allegations are sufficient to plead waiver of sovereign
immunity for claims arising from the Contract, the Court does not reach these arguments on
this Motion.

2. 	Breach of Warranty
48. 	The City also seeks dismissal of JBC’s claim for breach of warranty on
sovereign immunity grounds.58 The Court finds the City’s argument without merit.
49. 	Our Court of Appeals has recognized that plans and specifications published
in accord with the SSRS constitute “positive representations upon which a contractor
is justified in relying” and that a governmental agency “which furnishes inaccurate
information as a basis for bids may be liable on a breach of warranty theory[.]” Battle
Ridge Cos., 161 N.C. App. at 160 (quoting Lowder, Inc. v. Highway Comm’n, 26 N.C.
App. 622, 638 (1975)). “[A] claim for relief based upon a breach of an implied warranty
of plans and specifications arises under the contract and, if sufficiently pled, will
withstand a [ ] motion to dismiss on grounds of immunity.” 	Battle Ridge Cos., 161
N.C. App. at 160.
50. 	North Carolina has adopted the general rule that “a construction contractor
who has followed plans and specifications furnished by the owner, or his architect or
engineer, will not be responsible for consequences of defects in those plans or
specifications[ ]” because “there is an implied warranty by the owner that the plans
and specifications are suitable for the particular purpose, and that if they are
complied with[,] the completed work will be adequate to accomplish the intended
purpose.” Gilbert Eng’g Co. v. City of Asheville, 74 N.C. App. 350, 362–63 (1985). “In
order to establish a breach of such an implied warranty, the burden of proof is on the
contractor to prove that the plans and specifications were adhered to, that they were
58 (Mots. 4–5; see also City’s Br. Supp. 23–24.)

defective, and that the defects were the proximate cause of the deficiency in the
completed work.” Id. at 363.
51. 	Here, JBC has alleged that the City published the Plans and Specifications,
that JBC justifiably relied upon those Plans and Specifications,59 that JBC proceeded
with the Project in good faith, that “through additional effort and acceleration of its
operation[, JBC] . . . substantially complete[d] the Project[,]”60 and that as a result of
the “inaccurate and inadequate” Plans and Specifications, JBC suffered injury.61 The
Court concludes that these allegations, if proven, would permit a jury to find each
element of JBC’s breach of warranty claim. As such, applying Battle Ridge Cos., the
Court will deny the City’s Motion to dismiss this claim on sovereign immunity
grounds.
3. 	Mutual Mistake
52. 	The City next seeks dismissal of JBC’s claim for mutual mistake, also on
grounds of sovereign immunity.62 The City argues that since JBC’s claim for mutual
mistake posits that a valid contract was never formed between the City and JBC, and
because the City’s waiver of sovereign immunity extends only to its agreements with
59 (Am. Compl. ¶¶ 94–96.)
60 (Am. Compl. ¶¶ 52, 55.)
61 (Am. Compl. ¶ 99.)
62 (Mots. 4–5; see also City’s Br. Supp. 23–24.)

JBC pursuant to the Contract, JBC’s claim seeking to invalidate the Contract is not
a claim on which the City has agreed to be sued.63
53. 	JBC argues in opposition that the City misstates JBC’s claim for mutual
mistake, which is for an equitable adjustment of the Contract, not for the invalidation
of the Contract as a whole.64 The Court agrees with JBC.
54. 	JBC does not contend or allege that JBC and the City did not enter into a
valid contract due to a mutual mistake of fact.65 Rather, JBC contends that, due to a
mutual mistake, it is entitled to reformation of the Contract. As discussed at length
above, “in causes of action on contract [ ] the doctrine of sovereign immunity will not
be a defense[.]” 	Smith, 289 N.C. at 320. 	Since JBC has pleaded entry into a valid
contract, it has adequately pleaded waiver of sovereign immunity for claims on that
contract, including its claim for mutual mistake. 	Accordingly, the Motion will be
denied to the extent it seeks dismissal of JBC’s claim for mutual mistake on sovereign
immunity grounds.66
63 (Tr. 21:18–24.)
64 (See JBC’s Br. Opp‘n 19–20; Tr. 114:02–115:09.)
65 (See Am. Compl. ¶¶ 113–21.)
66 The City also argues in its reply brief that JBC’s claim for mutual mistake should be
dismissed because JBC’s “broad allegations fail to satisfy Rule 9(b)’s requirements.” (City’s
Reply Br. 13.) The City did not argue that JBC’s claim was insufficient under Rule 9(b) in
its supporting brief, and the issue does not appear in JBC’s responsive brief. Business Court
Rule 7.7 makes clear that “the Court may decline to consider issues or arguments raised by
the moving party for the first time in a reply brief.” Accordingly, the Court will not consider
the City’s Rule 9(b) argument on this Motion.

B. 	Statute of Limitations
55. 	Separate and apart from its sovereign immunity arguments, the City also
seeks dismissal of JBC’s claims for breach of contract, breach of express and implied
warranties, breach of the implied covenant of good faith and fair dealing, mutual
mistake, and subcontractor pass-through claims under Rule 12(b)(6) as barred by the
limitations periods set forth in N.C.G.S. § 1-53(a), the statute of limitations both
parties agree applies to JBC’s claims.67
56. 	Section 1-53(a) provides, in relevant part, as follows:
Within two years—
(1) An action against a local unit of government upon a
contract, obligation or liability arising out of a contract,
express or implied. 	Unless otherwise provided by law,
if the preceding sentence of this subsection would bar
commencement of a cause of action arising out of a
contract to improve real property: (i) such an action may
be brought no later than 90 days after substantial
completion, provided proper notice of the claim has been
given 	if 	required 	by 	contract, 	or 	(ii) 	if 	prior 	to
substantial completion the contract was terminated by
either party, such an action may be brought no later
than 90 days after the date of termination of the
contract. 	As used in this subdivision, “substantial
completion” 	has 	the 	same 	meaning 	as 	in 	G.S. 	1-
50(a)(5)c. 	This subdivision shall not apply to actions
based upon bonds, notes and interest coupons or when
a different period of limitation is prescribed by this
Article.
57. 	“A statute of limitations defense may properly be asserted in a Rule 12(b)(6)
motion to dismiss if it appears on the face of the complaint that such a statute bars
the claim.” Horton v. Carolina Medicorp, Inc., 344 N.C. 133, 136 (1996). “Whether a
67 (City’s Br. Supp. 7–12.)

statute of limitations defense should be resolved by a Rule 12(b)(6) motion or must
await a Rule 56 motion for summary judgment depends on whether the facts
necessary to adjudicate the defense are demonstrated by the complaint itself or
whether additional evidence must be considered.” 	BDM Invs. v. Lenhil, Inc., 2012
NCBC LEXIS 7, at *29 (N.C. Super. Ct. Jan. 18, 2012); see also Window World of
Baton Rouge, LLC v. Window World, Inc., 2017 NCBC LEXIS 60, at *23 (N.C. Super.
Ct. July 12, 2017). 	“The statute of limitations defense is inflexible and unyielding,
and the defendants are vested with the right to rely on it as a defense. The trial court
has no discretion when considering whether a claim is barred by the statute of
limitations.” Fisher v. Anderson, 193 N.C. App. 438, 439 (2008) (cleaned up).
58. 	JBC alleges that substantial completion of the Project occurred on 30 August
2021.68 Since this action was commenced on 31 January 2023, long after the 90-day
period following substantial completion had expired, JBC’s claims are timely only if
they accrued after 31 January 2021.
59. 	The 	City 	contends 	that 	the 	Amended 	Complaint 	and 	its 	referenced
documents demonstrate that JBC’s claims accrued more than two years prior to the
initiation of this action on 31 January 2023 and thus are time-barred.69 JBC contends
in opposition that its claims are timely because JBC did not have the right to
maintain a lawsuit for breach of contract until the Contract’s Mediation Process was
completed on 27 January 2023, citing Thurston Motor Lines, Inc. v. General Motors
68 (Am. Compl. ¶ 19; Tr. 83:13–15.)
69 (City’s Br. Supp. 7–12.)

Corp., 258 N.C. 323, 325 (1962) (“In general a cause or right of action accrues, so as
to start the running of the statute of limitations, as soon as the right to institute and
maintain a suit arises[.]”) (cleaned up). JBC argues that since it filed this action only
four days after its claims accrued, it acted well within the limitations periods in
section 1-53(a).70
60. 	The Court concludes that the City has the better of this dispute. 	Under
North Carolina law, “[c]ivil actions can only be commenced within the periods
prescribed [by the applicable statute], after the cause of action has accrued, except
where in special cases a different limitation is prescribed by statute.” 	N.C.G.S. § 1-
15(a). Our Supreme Court has recognized that a cause of action accrues at “the point
in time when the elements necessary for a legal wrong coalesce." Black v. Littlejohn,
312 N.C. 626, 633 (1985); see also Raftery v. Wm. C. Vick Constr. Co., 291 N.C. 180,
184 (1976) (“The cause of action accrues [w]hen the wrong is complete[.]”). 	In other
words, in North Carolina:
[t]he accrual of the cause of action must [ ] be reckoned from the time
when the first injury was sustained . . . When the right of the party is
once violated, even in ever so small a degree, the injury, in the technical
acceptation of that term, at once springs into existence and the cause of
action is complete.
Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., 180 N.C. App. 257, 262 (2006)
(internal citation omitted).
61. 	Our courts have consistently held that a claim for breach of contract accrues
when the contract is breached, i.e., when the promise is broken. 	See Christenbury
70 (JBC’s Br. Opp’n 8–9.)

Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 6 (2017) (“It is well settled that where the
right of a party is once violated the injury immediately ensues and the cause of action
arises. A cause of action is complete and the statute of limitations begins to run upon
the inception of the loss from the contract, generally the date the promise is broken.”)
(cleaned up); Penley v. Penley, 314 N.C. 1, 20 (1985) (“The statute begins to run on
the date the promise is broken.”); MacDonald v. Univ. N.C. Chapel Hill, 299 N.C. 457,
582 (1980) (“A cause of action for a suit involving a breach of contract accrues as of
the date of breach.”); Miller v. Randolph, 124 N.C. App. 779, 781 (1996) (same);
Liptrap v. City of High Point, 128 N.C. App. 353, 355 (1998) (same). 	Accordingly,
JBC’s breach of contract claim accrued when the City allegedly breached the
Contract.
62. 	Contrary to JBC’s contention, the Mediation Process agreed to by the parties
in the Contract does not extend the statute of limitations for any claims. It is not a
tolling agreement. It merely provides a mechanism for resolution of claims that JBC
must follow prior to filing its claims in court; it does not alter the fact that whatever
claims JBC brings in court must be timely. Rather, it is incumbent upon the parties
to initiate the Mediation Process promptly to ensure that, if the claims are unresolved
in the Mediation Process, they will be timely when brought in court.
63. 	Further, JBC’s reliance on Thurston Motor Lines, Inc. and its progeny is
misplaced. 	First, the majority of the cases upon which JBC relies are not breach of
contract cases. 	Second, and most importantly, none of these cases provides that a
pre-filing mediation requirement acts as a tolling agreement and extends the statute

of limitations. 	Rather, in the cases JBC cites, our courts merely recognized and
applied the general rule that a cause of action does not accrue, and the plaintiff does
not have the right to institute and maintain a suit, until a legal wrong is complete.
Thurston Motor Lines, Inc., 258 N.C. at 327 (holding that “plaintiff suffered injury
and his rights were invaded”, and thus his claim accrued, at the time that a defective
truck was sold to him); see also Ocean Hill Joint Venture v. N.C. Dep’t Env’t, Health
& Nat. Res., 333 N.C. 318, 323 (1993) (holding that the State as plaintiff did not have
the right to file an action to collect a civil penalty until the elements set forth by the
statute providing for the penalty had occurred); Raftery, 291 N.C. at 184 (holding that
plaintiff’s claim for wrongful death was timely because plaintiff brought the action
for wrongful death within two years of the intestate’s death, which was when the
wrong was complete).
64. 	Indeed, the only case JBC cites that involves a contract claim, Liptrap,
states and applies the general rule that a breach of contract claim accrues when the
promise is broken. See Liptrap, 128 N.C. App. at 356, 360–61 (holding that plaintiffs’
contract claims accrued when defendant, City of High Point, passed a resolution
which froze payments owed to plaintiffs under their employment contracts—thereby
breaching the contract).
65. 	JBC also relies on Nello L. Teer Co. v. Jones Bros., Inc., 182 N.C. App. 300
(2007), in which the court held that a stay should have been granted because the
plaintiff was contractually obligated to exhaust administrative remedies for its claims
before seeking judicial relief. 	Id. at 305. 	JBC argues that, under Nello L. Teer, its

action would have been premature before completion of the Mediation Process and
therefore JBC did not have the right to institute and maintain its claims until after
the Mediation Process was complete.
66. 	JBC’s reliance on Nello L. Teer, however, is similarly misplaced. Although
Nello L. Teer provides that JBC’s claims would have been premature had they been
filed prior to completion of the Mediation Process, the case does not stand for the
proposition that JBC’s claim did not accrue until that process was complete. Further,
this argument improperly conflates ripeness and accrual; although the moment a
claim becomes ripe for judicial review and the moment a claim accrues often coincide,
ripeness and accrual are separate and distinct and can occur at different points in
time. In sum, while Nello L. Teer may bear upon when JBC’s claim ripened, it does
not address or determine when JBC’s claim accrued.71
67. 	The Court thus turns to an examination of when the alleged legal wrong—
the purported breach of contract—is alleged to have occurred, since that determines
when JBC’s contract claim accrued.
71 The Court notes that JBC’s theory of accrual has been rejected by courts in other
jurisdictions 	as 	well. 	For 	example, 	the 	Appellate 	Court 	of 	Maryland 	(Maryland’s
intermediate appellate court) stated that “[t]he fact that [the parties] had contracted . . . to
engage in non-binding arbitration as a condition precedent to bringing suit in circuit court
did not mean that [plaintiff’s] causes of action . . . did not accrue [ ] when all of their elements
had arisen . . . It meant only that the parties, and each of them, had to take timely steps to
engage in arbitration before limitations expired; enter into a further agreement to toll
limitations; or file suit and request a stay pending arbitration.” Shailendra Kumar, P.A. v.
Dhanda, 426 Md. 185, 197 (Md. App. Ct. 2013); see also Wash. Tennis & Educ. Found., Inc.
v. Clark Nexsen Inc., 324 F.Supp.3d 128, 137–38 (D.D.C. 2018) (stating that the contention
that “the date of mediation is what counts for statute of limitations purposes is flat wrong[ ]”
and declining to determine that the filing of a mediation demand equitably tolled the statute
of limitations).

68. 	JBC contends that its claim is timely because the purported breach was the
City’s refusal to pay JBC for the costs it incurred in excess of the contract price, and
thus the breach did not occur and the claim did not accrue until the City made a
definitive declaration at the conclusion of the Mediation Process in January 2023 that
JBC’s claims for further payment were denied.72 	But the Court must consider the
claim as pleaded, and JBC has not pleaded its claim by alleging that the City
breached by refusing to pay JBC the extra costs it claims it is entitled to under the
Contract. See Davis v. Davis Funeral Serv., Inc., 2023 NCBC LEXIS 133, at *6 (N.C.
Super. Ct. Oct. 25, 2023) (holding that plaintiff’s contract claim was partially time-
barred and declining to measure the statute of limitations based upon a theory of
liability that was not alleged in the complaint).
69. 	Rather, JBC bases its breach of contract claim on four alleged breaches: (i)
the City’s changes to the traffic control patterns and planned workhour availability
from those set forth in the Plans and Specifications,73 (ii) the City’s failure to mitigate
any obstructions or conflicts that would interfere with JBC’s work on the Project,74
(iii) the City’s revisions to the designs and plans agreed upon in the Contract, namely
the City’s rejection of the use of precast storm drain boxes and discrepancies in plans
for reconstruction of the Hawthorne Lane bridge,75 and (iv) the City’s wrongful
72 (Tr. 86:07–19.)
73 (Am. Compl. ¶¶ 20–29, 75—76.)
74 (Am. Compl. ¶¶ 30–31, 77–78.)
75 (Am. Compl. ¶¶ 32–39, 75.)

assessment of liquidated damages, withholding of compensation throughout the
duration of the Project, and refusal to grant time extensions.76 JBC also alleges that
the City continued the objectionable conduct after the Project was put into public use
when it submitted extensive lists of tasks that exceeded the scope of the Contract,
threatened to terminate JBC from the Project if the tasks were not completed, and
refused to extend the deadline for completion of the Contract.77
70. 	With regard to alleged breaches (i) and (iii) above, the Amended Complaint’s
allegations show that JBC was on notice of the alleged conduct as early as 2018, and
no later than 2020. JBC was aware of the City’s changes to the traffic control plans
and its refusal to allow JBC to use precast storm drain structures no later than 6
March 2018 when JBC sent its March 2018 Letter to the City attributing delays in
progress in part to this conduct.78 	Similarly, JBC was aware of the issues arising
from the reconstruction of the Hawthorne Lane bridge no later than 28 February
2019 when JBC sent a letter to the City “providing a detailed outline of why the
Hawthorne Bridge issues were outside JBC’s control” and “a timeline of all the
proposals . . . to remedy the existing design deficiencies[.]”79 	Finally, JBC was on
notice of alleged design changes and the changes to the planned workhour availability
no later than 30 September 2020. It was at that time JBC sent the September 2020
76 (Am. Compl. ¶¶ 55–58, 79.)
77 (Am. Compl. ¶¶ 59–68, 79.)
78 (See Am. Compl. ¶ 40; March 2018 Letter.)
79 (See Am. Compl. ¶ 47; see also Index Exs. Filed Supp. Def’s Mot. Dismiss Ex. 2.)

Claim Letter, complaining that the City’s plans were “inaccurate, deficient, and
inadequate” while attributing ten improper revisions and deficiencies to the City, and
contending that the “City imposed workhour requirements that were far more
restrictive and disruptive than those establish[ed] in the Contract[.]”80
71. 	As to alleged breach (ii), JBC alleges that “[a]s 2020 progressed . . . [d]espite
the City’s duty to coordinate with existing utilities, JBC went months without any
coordination or schedule update from an energy utility[.]”81 JBC also complained in
its 	September 	2020 	Claim 	Letter 	that 	the 	time 	of 	performance 	and 	cost 	of
construction was increased as a result of “innumerable conflicts with existing
utilities” that were not shown on the [Plans and Specifications].”82 Thus, it is clear
from this letter that JBC encountered issues arising from the City’s alleged failure to
coordinate with utilities and interference from other contractors, and thereby had
notice of these issues by at least 30 September 2020.
72. 	With regard to alleged breach (iv), JBC asserted in its September 2020
Claim Letter that “[t]he City repeatedly failed to process the monthly progress
payments in a timely and complete manner as required by the Contract[ ]” and that
“[a]s warranted by the facts, JBC is [ ] entitled to an extension of time” beyond the
Contract’s completion date.83 	Thus, JBC had notice of the City’s alleged refusal to
80 (See Am. Compl. ¶ 56; September 2020 Claim Letter 3, 6–7.)
81 (Am. Compl. ¶ 53.)
82 (See Am. Compl. ¶ 56; see also September 2020 Claim Letter 3–4, 10–11, 12–14.)
83 (September 2020 Claim letter 14–15.)

grant time extensions and failure to make proper progress payments by at least 30
September 2020.84
73. 	In sum, the allegations and the referenced documents demonstrate that not
only did much of the conduct giving rise to JBC’s breach of contract claim occur prior
to 31 January 2021, but also that JBC was aware of the conduct more than two years
before it instituted this action. Therefore, to the extent that JBC’s breach of contract
claim arises out of alleged breaches of the Contract that occurred prior to 31 January
2021, the Court concludes that the claim is barred by the statute of limitations in
section 1-53(a). 	JBC’s breach of contract claim will therefore proceed to discovery
only to the extent that it seeks to recover for alleged breaches of the Contract that
occurred on or after 31 January 2021.85
84 (See Am. Compl. ¶¶ 55–58; September 2020 Claim Letter 14–15.)
85 The Court notes that, under North Carolina law, “a party may either by agreement or
conduct estop himself from pleading the statute of limitations as a defense to an obligation.”
Franklin v. Franks, 205 N.C. 96, 114 (1933). To be effective, however, “[a] party’s intent to
waive or shorten the statute of limitations for wrongs committed by another contracting party
should be expressed clearly, unambiguously, and explicitly.” Frye Reg’l Med. Ctr., Inc. v. Blue
Cross Blue Shield of N. Carolina, Inc., 2020 NCBC LEXIS 51, at *26 (N.C. Super. Ct. Apr.
17, 2020) (citing Beachcrete, Inc. v. Water St. Ctr. Assocs., 172 N.C. App. 156, 161 (2005)).
Here, JBC has pleaded in its Reply to the City’s Counterclaims that “[t]o the extent the causes
of action asserted in the Counterclaim sound in equity, they are barred on the grounds of
waiver.” 	(Pl. Johnson Bros. Corporation, A Southland Company’s Reply and Affirmative
Defenses Def.’s Countercl. and Pls.’s Third-Party Compl. Against URS Corporation, Second
Affirmative Defense, ECF No. 7.) JBC also argues in its opposition brief that it “has alleged
that the City constructively waived notice provisions by its own action/inaction.” (JBC’s Br.
Opp’n 10 (emphasis added).) Nowhere, however, has JBC pleaded or argued that the City,
by agreement or by its conduct, has waived or modified the statute of limitations for the
assertion of any accrued claims, including the City’s breach of contract claim. Accordingly,
JBC’s waiver defense does not preclude the dismissal of JBC’s breach of contract claim on the
grounds set forth above.

74. 	JBC’s claim for mutual mistake, however, is wholly barred by the statute of
limitations.
75. 	Our Court of Appeals has provided that “[f]or a claim based on fraud or
mistake . . . the cause of action shall not be deemed to have accrued until the
discovery of the aggrieved party of the facts constituting the fraud or mistake. 	A
plaintiff 	discovers 	the 	mistake—and 	therefore 	triggers 	the 	running 	of 	the 	[ ]
limitations period—when he actually learns of its existence or should have discovered
the mistake in the exercise of due diligence.” Wells Fargo Bank, N.A. v. Coleman, 239
N.C. App. 239, 244 (2015).
76. 	JBC’s claim for mutual mistake is premised upon the allegation that the
City gave JBC, and JBC thereafter relied upon, inaccurate information concerning
the traffic control plans and the work hours available to the contractor.86 	As
discussed at length above, the Amended Complaint and the referenced documents
provide that JBC complained about changes to the traffic control plan on 6 March
2018 and complained of the workhour availability on 30 September 2020. 	It is
therefore clear from JBC’s own pleading that JBC learned of the existence of the
alleged mistakes well before 31 January 2021. As a result, the Court concludes that
JBC’s claim for mutual mistake is time-barred under section 1-53(a) and will be
dismissed on that basis.
77. 	JBC’s claim for breach of implied and express warranties is also wholly
barred by the statute of limitations.
86 (Am. Compl. ¶¶ 114–20.)

78. 	In North Carolina, “a contracting [state agency] which furnishes inaccurate
information as a basis for bids may be liable on a breach of warranty[.]” Lowder, 26
N.C. App. at 638. 	To state a claim for breach of warranty arising from plans and
specifications as contemplated in Lowder, a claimant must allege that “the plans and
specifications were adhered to, that they were defective, and that the defects were
the proximate cause of the deficiency in the completed work.” 	ABL Plumbing &
Heating Corp. v. Bladen Cnty. Bd. Educ., 175 N.C. App. 164, 169 (2005).
79. 	In support of its breach of warranty claim, JBC alleges that “[t]he City
published [the Plans and Specifications for this Project]” and that “[i]n doing so, the
[C]ity both expressly and impliedly warranted that the Plans and Specifications were
adequate[,]” but that the Plans and Specifications were “inaccurate and inadequate
for their intended use.”87 JBC alleges that the Plans and Specifications existed by at
least 27 February 2017.88 Further, JBC asserted in its September 2020 Claim letter
that “JBC reasonably relied on the adequacy and accuracy of the [Plans and
Specifications],” and the City did not allow JBC to “perform its work under [the] as-
bid 	conditions[,]”89 that 	JBC 	“encountered 	innumerable 	conflicts 	with 	existing
utilities that were not shown on the plans[,]”90 and that, in general, “[t]he City’s
87 (Am. Compl. ¶¶ 94, 95, 97.)
88 (See Am. Compl. ¶ 19.)
89 (September 2020 Claim Letter 2.)
90 (September 2020 Claim Letter 3.)

original plans were inaccurate, deficient, and inadequate.”91 JBC’s allegations make
clear that JBC had notice of the alleged inaccuracy of the Plans and Specifications no
later than 30 September 2020, more than two years prior to the initiation of this
lawsuit. Accordingly, the Court concludes that JBC’s claim for breach of warranty is
time-barred under section 1-53(a) and will therefore be dismissed on that basis. See
ABL Plumbing & Heating Corp., 175 N.C. App. at 170–71 (dismissing plaintiff’s claim
for breach of warranty because plaintiff was aware of the injury arising from the
breach of warranty more than two years before plaintiff filed its complaint and noting
that “[f]urther damage incurred after the accrual of a cause of action only aggravates
the original injury and does not restart the running of the statutory limitations
period.”)
C. 	Breach of the Implied Covenant of Good Faith and Fair Dealing
80. 	The City next contends that JBC’s claim for breach of the implied covenant
of good faith and fair dealing should be dismissed because it is premised upon the
same facts as JBC’s breach of contract claim and is therefore duplicative.92 	JBC
disagrees, arguing that North Carolina courts have consistently declined to hold that
claims for breach of the implied covenant of good faith and fair dealing must be
dismissed as duplicative if the claim is premised on the same or similar facts as an
accompanying breach of contract claim.93
91 (September 2020 Claim Letter 6.)
92 (City’s Br. Supp. 35–36.)
93 (JBC’s Br. Opp’n 20–21.)

81. 	Under North Carolina law, “where a party’s claim for breach of the implied
covenant of good faith and fair dealing is based on the same acts as its claim for
breach of contract, we treat the former as part and parcel of the latter.” 	Cordaro v.
Harrington Bank, FSB, 260 N.C. App. 26, 38–39 (2018). “North Carolina state court
decisions considering good faith and fair dealing claims that are ‘part and parcel’ of
breach of contract claims . . . have concluded that the two claims merely stand or fall
together, 	not 	that 	the 	independent 	good 	faith 	and 	fair 	dealing 	claim 	should
necessarily be dismissed as duplicative.” 	Southeast Anesthesiology Consultants,
PLLC v. Rose, 2019 NCBC LEXIS 52, at *23 (N.C. Super. Ct. Aug. 20, 2019). 	Since
JBC’s implied covenant claim is based on the same alleged facts as its claim for breach
of contract, the Court shall grant and deny the Motion as to this claim to the same
extent as JBC’s breach of contract claim.
IV.
CONCLUSION
82. 	WHEREFORE, for the reasons set forth above, the Court hereby GRANTS
in part and DENIES in part the Motion as follows:
a. 	The Motion is DENIED under Rule 12(b)(2) for lack of 	personal
jurisdiction on sovereign immunity grounds;
b. 	The Motion is GRANTED under Rule 12(b)(6) on JBC’s claims for
breach of contract (First Cause of Action), breach of the implied covenant
of good faith and fair dealing (Fourth Cause of Action), and pass-through
claims (Tenth Cause of Action) to the extent those claims arise from

conduct occurring before 31 January 2021, and those claims are hereby
DISMISSED with prejudice to this extent as time-barred under the
applicable statute of limitations;
c. 	The Motion is GRANTED under Rule 12(b)(6) on JBC’s claim for breach
of expressed and implied warranties (Third Cause of Action) and Mutual
Mistake 	(Sixth 	Cause 	of 	Action), 	and 	those 	claims 	are 	hereby
DISMISSED with prejudice as time-barred under the applicable
statute of limitations;
d. 	The Motion is DENIED under Rule 12(b)(6) on JBC’s claims for breach
of contract (First Cause of Action), breach of the implied covenant of
good faith and fair dealing (Fourth Cause of Action), and pass-through
claims (Tenth Cause of Action) to the extent those claims arise from
conduct occurring after 31 January 2021, and those claims shall proceed
to discovery;
e. 	The Motion is DENIED as to JBC’s claim for violations of the Prompt
Payment Act (Seventh Cause of Action) and that claim shall proceed to
discovery.94
SO ORDERED, this the 27th day of February, 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge
94 See footnote 38, supra.